Accounting, economics, and handball

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Monthly Archives: November 2016

Part of Jim Geraghty’s Morning Jolt is posted at the Corner. It includes the following:

This morning Ron Fournier, who’s been covering the Clintons since the 1980s, offers an intensely groan-inducing report: “Raising doubts about legitimacy of election, even w/out overturning result, is part of Clinton’s plans to keep her options open for 2020… Make some calls. You’ll hear the same from her confidants.”

It is both the good news and the bad news. It is bad news for the Democratic Party and the country. Bringing the Democrats back to the center is going to be long, painful, and uncertain. It will be bad for the country because, like baseball, politics needs competitive balance. We hope they will make progress but we are not sanguine about it.

It is short term good news for the GOP. They will win lots of elections. Just like in baseball, however, competition is needed to bring out the best. The country needs two good parties. Great is too big an ask. In the past parties have turned around quickly. Here is hoping it happens again for the Democrats like in ’94. It was a matter of meeting the GOP ideas. It didn’t last long for either party but those four years had a bigger impact.

We don’t know if the principals care about the states but they probably care about taking blame for it. Janet Hook discusses what the Democrats should do next and says:

And President Barack Obama and Vice President Joe Biden, who held the White House at a time when the party’s ranks were decimated in statehouses, both say they may remain engaged and help the party rebuild. [Emphasis added]

To put it bluntly, when Obama entered office the party controlled 60 Senate seats and 258 House seats. When he leaves office the party will likely hold less than 185 House seats and a mere 46 Senate seats.

The devastated Democratic landscape looks even bleaker at the state level. The party will hold a mere 18 [compared to 28] Governorships while the GOP holds 31 (or 32 depending on Alaska) The GOP will control 68-69 legislatures (out of 98) [Dems went 60 to 29 with one tie] and have complete control in 23 states. Democrats will have complete control in a mere 7 [compared to 17] states (NE and Pacific Coast).

The Obama legacy for the Democratic Party is at least double-decimation at all levels. We hope they will turn back to the center because it will be better for the country to have two realistic choices. We are, however, not optimistic it will happen before 2020. It will happen eventually.

Kara O’Connor’s article is entitled, Don’t Let TPP Sink US Dairy Industry but we like our title above. She starts with NAFTA causing Mexican dairy farmers to fail and illegally come to the US. There must have been lots of those folks.

Sidebar: TPP is borderline free trade and some free traders have come out against it. It seems to be dead and it seems unlikely that the president-elect will revive it. So why did O’Connor write it? End Sidebar.

Then she sees the problem as this three cushion shot:

Canadian farmers years ago realized the problem of oversupply, and came together to prevent it through a quota system. As a result, Canadian farmers can actually make a living and afford to modernize on a farm of 100 cows or fewer. [Our comment: And Canadian consumers pay extra for milk and milk products because of the cartel.]

However, if the Trans-Pacific Partnership passes, the Canadian oversupply control system will be dismantled. American exports to Canada will increase, pay prices in Canada will drop, and thousands of Canadian dairy farms will go under. I take no joy in the fact that by pushing them under we can make it another year. I would rather that all dairy farmers keep their heads above water.

So if the Canadians support it we are in trouble? We are now in the business messing about in Canadian politics to support Canadian dairy farms and hurt US farms. This is getting silly. Sometimes there are simple solutions to seemingly complex problems. Here is one. Think about the consumers. Being anti-free trade over milk is a great example of wanting to tax the poor via tariffs to support the rich. We know that there are folks richer than dairy farmers but it is still true that the poor is buying lots of milk from the richer producers. The consumers in Mexico (with even a greater percentage of poor folk) that have already benefitted from the reduction in tariff wall. The consumers in Canada that are being taken advantage of by the Canadian dairy cartel. Consumers in the other TPP countries. All of those consumers benefit from free trade. The complicated part is TPP because the agreement is so (thank you Mr. Lame Duck) complicated. The only complex question about TPP is: Is it free trade?

The problem is that most of the kids there don’t want to be part of the coastal elite. We have a very large sample of accounting major interest. Chicago is usually out. New York and California are almost always out. How will they woo them to the coasts?

Another faculty member reminds us that marketing majors are different from accounting majors. Fair enough. The differences might be caused by opportunity, as accounting majors don’t need to look far for it, or it might be personality but the placement of the two majors does not coincide. We still think, however, that the coastal organizations will have a hard time getting real diversity as the folks that want to go there aspire to it. How will they connect with the folks that want to stay in the flyover zone?

As a faculty member we have always cautioned against using samples of one. That is particularly true when the sample is a faculty member. When a faculty member says, “I was like this,”

Sidebar One: I was like this has another problem besides the sample size. Memories of events are often faulty. Few of those faculty were stellar motivated students in every class. Some were but not all. End Sidebar One.

or “I find this interesting,” or “I learn like this,” we have always cautioned that it is unlikely for a faculty member to be representative for students.

Now it looks like our sample of one on advertising may have had some validity. We have enjoyed TV in the recorded era because the ads make us upset with the products. The stories they tell are not interesting to us. Except for classic rock sells vehicles, there isn’t much advertising we enjoy.

Sidebar Two: Speaking of classic rock, even the 49ers dance team started with the Kinks yesterday. The 49er drumline is different and entertaining. End Sidebar Two.

Our reaction to the advertising might be age and it might be location. Now the WSJ suggests that we might have been on to something. Trump’s election has led advertisers to be concerned that:

After spending years courting U.S. consumers with aspirational images of upscale urban living, they may have misjudged the yearnings of much of their audience.

One takeaway is that not everybody wants to be a coastal elite. It is the opposite of our personal aspiration. Advertising firms might start to look for talent elsewhere:

A diversity hire “can be a farm girl from Indiana as much as a Cuban immigrant who lives in Pensacola,” said John Boiler, chief executive of the agency 72andSunny, whose clients include General Mills Inc.and Coors Light. The agency plans to expand its university recruitment programs to include rural areas.

Schools like mine will be happy to help them. The problem is that most of the kids there don’t want to be part of the coastal elite. We have a very large sample of accounting major interest. Chicago is usually out. New York and California are almost always out. How will they woo them to the coasts?

The point is that samples of one are only suspect. They are not always wrong. A challenge in decision making is when to gather more data and when to go with your gut. It is true in both advertising and teaching. Might we see different ads in the next campaign cycle?

What direction will the Democrats take as we begin the next presidential election? We believe that a party learns one big thing from the previous election. The Republicans learn to savor electability after 2008. They wanted toughness after 2012. What will the Democrats learn after 2016. Of course not everyone will agree but what approach will win the majority of the Democrats votes?

We think that it will go in one of two very different directions. Direction one is to reverse Obama’s double decimation of the party. In the Senate, House, states, and finally with the White House the Democrats have been pounded at every level. A reasonable reaction would be to move toward the center and try to rebuild the party. It may happen but we don’t see it that way.

We don’t understand it but the Democrats seem to like Obama despite what he has done to their party. We think that they will see Herself as a move to the center (really!) and learn to reject that. Like the GOP looking for the next Reagan they will look for the next Obama. Somebody young and pretty without much of a history that meets a preference. One obvious choice would be Kamala Harris, the new junior senator from California. Even the pin-up president said:

“She also happens to be by far the best looking attorney general in the country,” Obama said of California’s Kamala Harrisduring a fund-raiser.

Every Joe agrees and has the pictures to prove it. Kamala would be an excellent choice to be the next Obama because she is young, pretty, and meets even more preferences. We think Kamala is much more likely than a Tony Blair clone. We hope we are wrong.